Masters of Deception

A Prominent Indiana Family-in-Exile Is Accused of Running a Drug Ring

Did he know the Heilbrunns? The United States consul in Salzburg, Austria, is a decent man named Herbert Malin. His primary responsibility is looking after the 600-member American community in the lovely 17th-century baroque city where Mozart was born. It is a civilized way to end a long foreign-service career, and Malin enjoys it. The Heilbrunns? Of course he knew them, he said. Everyone did. One son, Paul, was a commodities broker—very elegant. The other, Richard, had married a local girl and took part in international ballooning events. And the mother, Linda Leary, was a delightful woman who had made herself indispensible in the affairs of the American community. "I know them all personally," said Malin. "They are living quite prominent lives. Why?"

Because, he was told, before coming to Austria the Heilbrunns were the alleged ringleaders of the biggest marijuana-smuggling operation ever encountered by the U.S. government.

Malin gasped. "I'm thunderstruck," he said. Mrs. Leary? A fugitive? Later he shook his head in bewilderment. "I've never come across a situation like this before," he said. "Where people like this have been so much a part of local society."

Apparently Herbert Malin didn't really know the Heilbrunns, who were picked up by a team of Austrian police and a U.S. Drug Enforcement Agency officer on May 24, some two weeks later, and transported to jail in the north Austrian town of Wels. But he could take comfort: He was hardly the first to be so deceived.

Reporters in Indianapolis, writing in 1987 about the 136-page federal indictment that led eventually to last month's Salzburg arrests, called the Heilbrunns' alleged crime ring the Yogurt Connection—an allusion to the family's YoGo franchise. A better name might have been Operation Double Life, because according to the indictment, and to some 50 friends and former employees interviewed by PEOPLE, the solid-citizen image the family presented in Salzburg was much like the one they had polished successfully for nearly two decades back home in Indiana. Until the day they left for Salzburg, the Heilbrunns, particularly Linda Leary, 59, and her younger son, Paul, 35, had enjoyed sterling reputations in Indianapolis. Paul was a stylish broker and financier who co-wrote a commodities column for a local business newspaper. Linda was head of the Indianapolis League of Women Voters, president of the local chapter of the National Council of Jewish Women and a volunteer fund-raiser for the city's new zoo. "If you asked for the name of a strong, influential woman in Indianapolis, Linda's name came up and up and up," says a longtime friend, Mary Jo Dorr.

But according to the 53-felony-count indictment filed in U.S. district court in Indianapolis, this high regard reflected only the legal part of the Heilbrunns' surprising range of achievements. From 1975 to 1987, the family is charged with having led a gang of up to 100 members that ran an estimated 250,000 pounds of Colombian, Jamaican and Thai hemp worth $50 million to $100 million into the Midwest. "No one thought people who played tennis at the club and did good work with the League of Women Voters could also be criminals," says U.S. Attorney Deborah Daniels, who filed an extradition request with the Austrian government early this year.

Obviously, some still find the apparent contradiction hard to accept. Two years after the Heilbrunns' sudden departure for Austria with an alleged $12 million in loot, Jonathan Stein, senior rabbi at Indianapolis's largest synagogue, visited Linda in Salzburg with a tour group from back home. "She certainly misses her old friends," he reported. "She is very regretful of what happened." And Mary Jo Dorr, wife of Indianapolis Episcopal minister John Dorr, said of her old friend, "She's a fine, fine person. Her leaving [the States] is a real loss to Indianapolis. But," continued Dorr loyally, "she's continuing to help people in Austria."

Perhaps Consul Malin can style himself a quick learner.

There are those who trace the alleged corruption of the Heilbrunn family back to North Central High School in suburban Indianapolis. A typical school of its type, it was awash in the late '60s with student money. "Most of these kids came from homes where money was the measure of self-worth and success," says Billy Walker, an assistant principal at the school then and now. Says a former student: "The attitude at the time was, they came from money, they could buy anything they wanted, they'd not been taught there are consequences to what you do. People felt invincible."

Thus, say investigators, Paul Heilbrunn, his older brother, Richard, and some equally well-heeled friends began supplementing their families' largesse to them by selling marijuana—first joints, then nickel bags and eventually even pounds. Says Walker: "It was the very beginning of the drug culture in Indianapolis, and they were the pioneers. We knew something was going on, but they were very bright, very smooth. The word I would use is con men."

One person they apparently didn't have to con was their mother. By the early 70's, Linda Leary (who was twice divorced and retained her second husband's name) had established herself as a confident political player, a key booster of the successful good-government campaign of then-mayor Richard Lugar, now a U.S. Senator. She lunched with congressmen and dignitaries and was an A-list guest at the best dinner parties. But when she got home, she was content to be her boys' buddy. The Heilbrunn house on tree-lined West 77th Street became a mecca for North Central's young and reckless. According to one family friend, her sons could "do anything and not get in trouble. She wanted to be a 'with it' mom, and she let the kids determine the morals of the family."

Where that might lead became clearer in 1971—after Richard had graduated from high school and Paul had dropped out—and the brothers began running a business out of the family garage. Officially they were selling Dr. Bonner's Natural Castille Soap; in reality, say investigators, the product was pot. By 1975 the Heilbrunns' front was a health-food distribution business called Heilbrunn and Friends, which boasted a large warehouse in a nearby industrial park. Initially the "friends" were North Central grads who had allegedly gone on to set up marijuana sales networks at various colleges. But soon the gang was supplying the public at large in 11 Midwestern states. The marijuana came by ship from Colombia, Jamaica and Thailand, and then was trucked into the heartland. To hide the shipments, the enterprise's lieutenants, often North Central alumni, arranged for short-term storage in remote Hoosier barns. "We were offered $70,000," says one farm wife who refused. "They said we only had to leave town one night and ask no questions, and the money would be there when we returned."

The guiding intelligence behind the business, government investigators say, was Paul Heilbrunn. Officially, Richard, now 38, occupied a rung on the gang's organizational ladder just below his brother, along with Chuck Stocksdale, another North Central graduate. But Richard lacked Paul's ambition. A big teddy bear of a man who wore a beard and ponytail and favored plaid shirts, blue jeans and organic food, he lived in a farmhouse north of the city and took long walks in the woods with his red malamute, Henna. "He was revered," says a friend. "He was a guru. Everybody loved Richard."

But his younger brother was respected, and feared. In the company of friends and associates, Paul was called Melech—Hebrew for King. According to the indictment, he organized the gang and saw to its growth, setting up a command structure and limiting the flow of information from one level to another, thereby limiting the damage any captured member could do should he choose to cut a deal with police. Paul was also the one, the government charges, who directed lawyers to set up dummy corporations in Panama and the Bahamas to launder the tens of millions of dollars that were starting to pour in. He was "an extremely, extremely intelligent guy," says attorney Robert Davies, 53, who was indicted for his role in the laundering scheme. At his trial, Davies claimed he was an unwitting accomplice ("You don't ask your clients where they get their money") and was acquitted, but by then the bad publicity had cost him his good reputation and $400,000 in legal expenses.

No druggie himself, Paul wore three-piece bespoke suits, spun around town in a late-model BMW, frequented the most expensive restaurants and paid in hundred-dollar bills. "If you went to a good concert in Indianapolis, he'd be in the front row," says a friend. He hired jets to take business associates to the Super Bowl and the NCAA basketball finals. He had presence. "He was beautiful," says a woman who knew him. "When he entered a room, people stopped talking and stared at him." Many also deferred to him, says another acquaintance of the period. "Nobody was close to Paul. We all knew he was involved in drugs, but you'd dare not mention it. Paul cared about no one but Paul."

That statement was chillingly illustrated in September 1975. According to federal prosecutors, Paul was supposed to talk to John Jenkins, an employee and an old friend from North Central, about a large debt Jenkins owed the organization. Instead, he asked Richard to take his place. At the meeting, Jenkins pulled a pistol, killed the man who had accompanied Richard and put four bullets into Richard, leaving him for dead.

Jenkins eventually hanged himself in a British Columbia jail, and Richard survived, though with a pronounced limp. Federal authorities and, say friends, Linda Leary are both convinced that Paul knew exactly what he was missing. Telling acquaintances somewhat improbably that the shooting had transpired over "a misunderstanding over health food," Leary ranted openly against her younger son, and a family rift opened that has never healed.

Still, nobody withdrew from the business. By this time the onetime rich kids of North Central High had become grotesquely wealthy drug lords. Friends talk of parties featuring bowls of cocaine; one guest who accepted an invitation to do a little hashish recalls being escorted to a room filled floor-to-ceiling with bricks of it. One lieutenant kept a trilevel lakeside home complete with a dock, a boat and liquor cabinets stocked with Dom Pérignon. (His girlfriend at the time says she became nervous after he started talking about bulletproofing his Mercedes and dropped him when she discovered guns in his bed.) There was so much cash, say authorities, that the organization began using electric money-counting machines and instructed employees simply to throw out all one-dollar bills.

Laundered money from the offshore corporations was allegedly funneled back to Indianapolis and often turned into loans to the unknowing: a local radio station, a Cablevision franchise, even the Indianapolis Dining Guide, whose publisher was Michael Hudnut, son of the city's current Mayor. For her troubles, Linda Leary was named president of a four-state soft-drink franchise, a business venture, she later told friends, that cost her $1.9 million in losses.

Then, in 1983, federal agents say they picked up a cocaine distributor who had been given the boot by Paul because of his drug use. In exchange for a grant of immunity, he agreed to tell the authorities as much as he knew about the Heilbrunn operation. In November 1987, after four years spent gathering evidence, the authorities moved in on the Yogurt Connection with an indictment heftier than most short novels. So far there have been 25 arrests and 20 convictions, and the casualties have included Chuck Stocksdale. Most of the organization's top lieutenants are either in jail or in hiding or have been granted immunity pending further court action.

Federal investigators, in fact, got nearly everybody they wanted—except the Heilbrunns. In the second half of 1985, friends noticed that Linda was becoming increasingly nervous and was traveling to the Bahamas more frequently. She mentioned to one couple that she might be taking a long "vacation" and asked whether they would like to rent her house. They agreed, and Linda and her sons left in November. But she didn't seem happy about it. She cried as a friend helped her draft her resignation from the National Council of Jewish Women.

The family settled in Austria, the country Linda's second husband had fled during the Nazi occupation and one with a lenient policy toward the importation of foreign funds. Richard, his Austrian wife (whom he met there), their 22-month-old son and Linda have resided in a yellow mansion in the wealthy Salzburg exurb of Glasenbach. Friends from Indiana who visited Linda say she had become "estranged" from Paul and was sometimes very unhappy, But hardly idle. She became a volunteer for a tour company, helped coordinate holiday celebrations for American citizens living in Austria and served as secretary for a branch of the Austro-American Society.

As for Paul, five weeks ago he visited the bar of the elegant Sheraton Salzburg Hotel. Smartly attired as always, he talked about his wife and two young daughters, who live with him in the picture-book town of Mondsee, where parts of The Sound of Music were filmed, and about his father, who is seriously ill in Michigan. "I'm an innocent man," he proclaimed, dismissing the charges against him as the malicious concoctions of conviction-crazed prosecutors and former friends lying to stay out of jail. "I can't even pay my debts in the U.S. because they seized my assets," said Paul unhappily. "What happened to innocent until proven guilty?"

Perhaps he should return to the U.S. to defend himself? "My business here is going good," he said, noting that it would likely go far less good if he were to spend "a couple of years in jail, on pretrial detention," which is what his lawyers predict would happen should he reappear in Indiana voluntarily. Extradition, he made clear, was not a threat he took very seriously. "I'm not worried about that," he said. "There's nothing to worry about."

Two weeks later, Paul is still well-dressed, still composed. But he is in the custody of one of Austria's Justizwache, walking the corridor from the district courthouse in the quaint, medieval market town of Wels to his cell in a nearby penal block. On the way, he catches a glimpse of an acquaintance, makes a wry face and gives the thumbs-down sign. Half an hour later, Richard takes the same doleful stroll.

"He underestimated us," says U.S. Attorney Deborah Daniels of Paul. "He underestimated our patience. He thought we'd forget all about him." Gloats one of her colleagues: "He finally confronted something he couldn't talk or buy his way out of." After three years of bureaucratic spadework, the U.S. government has asked the Austrians to take the first step in the extradition process, a hearing on whether the defendants should be jailed prior to the actual decision, on grounds that they might leave the country. Linda, though indicted in the U.S. on 12 felony counts, has been given her freedom, for now; visibly shaken, she was whisked back to Glasenbach by a lawyer. Paul and Richard, apparently considered a risk to flee, will stay in the Wels jail until their lawyers can get them out on appeal, or until Austria decides whether to honor the American extradition request.

According to Paul's Indianapolis attorney, Linda Pence, he could delay that moment for up to a year and a half if he wants. And he may want. While waiting in jail in bucolic Wels, he is not likely to be treated too harshly. With their high-priced lawyers and their air of exotic foreignness, he and Richard are the town's celebrity inmates. A few days ago, an assistant to the investigating judge in the case could be heard referring to them as die Herrschaften, which translates roughly as "the gentlefolk."

Eventually, no doubt, she too will learn that appearances can be deceiving.